Moody's rates 3 Serbian cities

Moody's Investors Service said it assigned a first-time issuer rating of Ba3 to the Serbian City of Novi Sad, as well as B1 ratings to the cities of Kraljevo and Valjevo.

The outlook is stable.

These ratings are underpinned by the cities' sound overall budgetary performances and limited direct-debt exposure, Moody's said.

Novi Sad's prudent budgetary management, which underpins its Ba3 rating, is evidenced by stable operating margins, particularly in 2009, when it managed to impose notable cost-cutting measures to mitigate a fall in operating revenue of 8%, driven by economic recession, the agency said.

Kraljevo's B1 rating reflects its flexible capital expenditure implementation strategy, which has enabled it to maintain a balanced budgetary performance and to preserve its direct debt-free status over the past three years, Moody's said.

Valjevo's B1 rating reflects the city's responsible budget and debt management policies over the past four years, which have helped to maintain a balanced financial performance, contained debt levels and manageable debt service, the agency said.

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